Damodar Valley Corporation Vs West Bengal State Electricity Distribution Company Limited (Competition Commission of India)
Summary: The Competition Commission of India considered an Information filed by Damodar Valley Corporation (DVC) against West Bengal State Electricity Distribution Company Limited (WBSEDCL), alleging contravention of Sections 3 and 4 of the Competition Act, 2002. DVC, a statutory electricity utility operating in its Command Area, alleged that WBSEDCL had extended competitive tariffs beyond the erstwhile Durgapur Projects Limited (DPL) area, including to consumer categories and areas where DPL had no prior service history. DVC alleged that WBSEDCL was charging prices below its average cost of supply (ACoS), engaging in predatory and discriminatory pricing, leveraging its broader State-wide market position and denying DVC market access.
DVC relied on WBERC tariff and Annual Performance Review material and calculated an ACoS of approximately Rs. 7.19/kWh, while alleging that WBSEDCL’s average tariff in the relevant DVC Command Area was approximately Rs. 4.835/kWh. It also alleged consumer migration from DVC to WBSEDCL and a loss of Rs. 121 crore. DVC sought investigation by the Director General and declarations concerning abuse of dominance, predatory pricing, discriminatory pricing and leveraging under Section 4.
WBSEDCL disputed the allegations and principally contended that tariff determination and competitive tariff arrangements fell within the regulatory framework of the Electricity Act, 2003 and WBERC’s jurisdiction. It submitted that Section 62 of the Electricity Act, 2003 and the applicable Tariff Regulations permitted competitive tariffs in multiple-licensee areas, subject to the applicable ceiling. WBSEDCL also relied upon the Supreme Court decision in Competition Commission of India v. Bharti Airtel Limited & Anr. (2019) 2 SCC 521 concerning the interaction between competition law and sectoral regulation.
